Thoroughly planned goals provide a blueprint for a company's actions and keep it headed in the right direction. According Jay B. Barney and Ricky W. Griffin in their book "The Management of Organizations," organizational goals serve four basic functions: they provide guidance and direction; facilitate planning, motivate and inspire employees; and help organizations evaluate and control performance. Employees can use the organization's goals as a basis for making their own decisions. Specific goals, such as “try to get more than 80 percent correct,” are more helpful than vague encouragement.
Top management sets major strategic goals for the entire company. These goals directly support the mission statement or overall company policy and plan. Laura E. Marler, in the Reference for Business website, lists eight major strategic goals that dominate business planning: market standing goals; innovation goals; productivity goals; efficient use of assets, stock value or return on assets; management development and performance; employee conduct; and public and social responsibility of the organization.
Strategic goals are used to define tactical goals, which indicate the specific achievement objectives of each department and division in the organization. The most productive tactical goals will lead directly to the accomplishment of strategic goals. For example, if your strategic goal is to reduce costs by 15 percent, set a tactical goal for each department to reduce costs by a certain amount so that the average of all the divisions is 15 percent.
The lowest level of the organization determines operational goals. These apply to specific employees or groups, and focus on individual responsibilities. For instance, a tactical goal related to an increase in revenue causes your sales manager to implement a direct operational goal aimed at increasing sales by a certain amount.
Super-ordinate goals affect more than one party and often are used to resolve group conflicts. When two disagreeing groups are forced to work together on a common objective, they often resolve tensions and animosity and become more productive. For a super-ordinate goal to work, all groups should be necessary to the work, everyone must have the desire to succeed and all groups should receive rewards when the goal is achieved.
Goals provide a framework to work inside and help to focus effort. Make the goals specific. While an objective such as "increase capital" is vague, an objective such as "increase profits by 5 percent before December 15" details exactly what needs to be accomplished. Be optimistic and phrase your goals in a positive manner. Setting unattainable goals serves no purpose, so look at past performance and decide what is realistic. Set major long term goals for five, 10 or 20 years with short-term goals building up to them.
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